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Profiles in Benefits

In an ongoing feature in Pension & Benefits Daily, we are profiling attorneys and
other leaders in the retirement and health-care benefit industry to give our readers
a closer look at the people they work with and who shape the conversation. This profile
features Joshua Gotbaum, former head of the Pension Benefit Guaranty Corporation and
currently a guest scholar at the Brookings Institution.

Sept. 6 — Former PBGC Director Joshua Gotbaum isn’t one to shy away from a challenge.

Long before he became director of the Pension Benefit Guaranty Corporation in 2010,
Gotbaum helped get Hawaiian Airlines out of bankruptcy, helped businesses and labor
unions as an investment banker, and served as first Chief Executive Officer of the
September 11th Fund.

With stints in the Ford, Carter, Clinton and Obama administrations, it might appear
Gotbaum set his sights on a career in government from an early age, but that wasn't
the case. Gotbaum entered Stanford University intent on becoming a biochemist, but
soon changed course.

“It was during the Vietnam War period. It seemed then that science was doing fine,
but government was a mess, so I decided to switch to government and change the world,”
said Gotbaum, who is currently a guest scholar at the Brookings Institution.

After obtaining public policy and law degrees from Harvard, Gotbaum joined the Carter
White House, starting on the White House energy staff. He then worked for the President’s
inflation adviser, and ended on the economic policy staff.

Investment Banker

In an effort to “become a better government regulator,” Gotbaum decided it was time
to gain some business experience and took a job as an investment banker with Lazard
Ltd.

It turned out he had quite the knack for investment banking, staying at Lazard for
12 years and becoming a partner. But, with a father who headed up New York's largest
union, it wasn't long before Gotbaum was working with labor unions, too.

“I guess the acorn doesn’t fall into an entirely different forest. In addition to
doing garden variety corporate finance, we also helped unions when companies were
in trouble,”
said Gotbaum, who is an a capella singer and musician in his spare time. His clients
at Lazard included the steelworkers union and the airline pilots.

When Bill Clinton took office, Gotbaum heard the siren call of the government once
again, taking presidential appointments first in the Department of Defense, then as
the Assistant Secretary of Treasury for Economic Policy, and finally with several
senior positions in the White House’s Office of Management & Budget.

Following his stint in the Clinton administration, Gotbaum promised his family he
would return to what he describes as “the land of the overpaid.” Instead, he answered
the call of United Ways and the New York Community Trust, and agreed to become the
first CEO of the September 11th Fund, which was the second largest charity to benefit the victims of the Sept. 11
attacks. Gotbaum spent a year developing programs to help those affected.

After that, Gotbaum was tapped to run Hawaiian Airlines as Chapter 11 trustee. Even
though he’d never run an airline before, it was a resounding success.

“I’m pleased to say I got my creditors 100 cents on the dollar, got Hawaiian Airlines
to the highest operating profit margin of any airline in America, and negotiated labor
agreements that paid Hawaiian better than United and American—so it worked out pretty
well,” he said.

Leading the PBGC

With a change in administration, it wasn’t until 2010 that Gotbaum found himself drawn
back to the government. While waiting for clearance in a job in the Defense Department,
the White House called and asked if he'd be willing to run the PBGC, the agency that
provides federal insurance for pensions.

“I asked, ‘Why me?' It turned out the reason was that Treasury and Labor couldn’t
agree on anybody,”
Gotbaum said. “The Labor Department didn't want someone running the PBGC who had ‘no
sympathy for workers’ and Treasury didn't want to hand over $85 billion to ‘some hack’
without investment experience,” he said.

Gotbaum called his time with the PBGC very rewarding, allowing him to work with an
"absolutely excellent staff.”

Back to the Private Sector

After four years running the PBGC, Gotbaum decided it was time to return to the private
sector once again, taking a position as a guest scholar at the Brookings Institution.

“I thought I'd stay for six months at the most,” said Gotbaum, “but Brookings has
been a ton of fun.” Being at Brookings freed him up to provide advocate publicly for
improvements in the federal government's regulation of retirement plans, something
he couldn't do while he was in the government.

“When you’re in the government, you cannot say that the government itself is undermining
retirement security,” he said. “Being at Brookings has let me admit that the emperor
needs some new clothes.”

Gotbaum still expects to find yet another institution to fix, but last year his plans
were thrown a curveball when he had the misfortune of being on Amtrak Train 188 when
it derailed. “Instead of looking for what I would do next, I spent my time fixing
broken ribs and a damaged knee.”

Now, with ribs healed and a new knee, Gotbaum is looking for the next challenge. All
he’ll say about it is, “I’ll keep you posted.”

To contact the reporter on this story: Kristen Ricaurte Knebel in Washington at
kknebel@bna.com

To contact the editor responsible for this story:
Jo-el J. Meyer at
jmeyer@bna.com

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